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Standard XII

Accountancy

Reassessment of Liabilities

Pinki, Deepat...

Question

Pinki, Deepati and Kaku are partner’s sharing profits in the ratio of 5:4:1. Kaku is given a guarantee that his share of profits in any given year would not be less than Rs 5,000. Deficiency, if any, would be borne by Pinki and Deepti equally. Profits for the year amounted to Rs 40,000. Record necessary journal entries in the books of the firm showing the distribution of profit.

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Solution

Profit and Loss Appropriation Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to

Profit & Loss

40,000

Pinki’s Capital

20,000

Less: Gurantee to Kaku
{1,000 × (1/2)}

(500)

19,500

Deepti’s Capital

16,000

Less: Guarantee to Kaku
{1,000 × (1/2)}

(500)

15,500

Kaku’s Capital

4,000

Add: Deficiency received from

Pinki

500

Deepti

500

5,000

40,000

40,000

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Pinki, Deepti and Kaku are partner's sharing profits in the ratio of 5 : 4 : 1 Kaku is given a guarantee that his share of profits in any given year would not be less than Rs 5,000. Deficiency, if any, would be borne by Pinki and Deepti equally, Profits for the year amounted to Rs 40,000. Record necessary journal entries in the books of the firm showing the distribution of profit.

Q. A, B and C are partners sharing profits in the ratio of 5 :4: 1. C is given a guarantee that his minimum share of profit in any given year would be at least Rs. 5,000. Deficiency, if any, would be borne by A and B equally. The profit for the year 2017-18 amounted to Rs. 40,000. Pass necessary Journal entries in the books of the firm.

Q. A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is given a guarantee that his minimum share of profit in any given year would be at least ₹ 5,000. Deficiency, if any, would be borne by A and B equally. Profit for the year ended 31st March 2019 was ₹ 40,000.
Pass necessary Journal entries in the books of the firm.

P, Q

and

R

are partners sharing profits in the ratio of

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respectively.

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R s .50, 000

. The profit for the year ending 31st March, 2018 is

R s . 3, 50, 000

. Amount of shortfall in the profits of

R

will be borne by

P

and

Q

in the ratio of

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respectiyely. Pass necessary Journal entry regarding deficiency borne by

P

and

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Pass Journal entries in the books of firm and prepare Profit and Loss Appropriation Account.

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Profit and Loss Appropriation Account
Dr.						Cr.
Particulars				Amount Rs	Particulars	Amount Rs
Profit transferred to					Profit & Loss	40,000
Pinki’s Capital		20,000
Less: Gurantee to Kaku {1,000 × (1/2)}		(500)		19,500

Deepti’s Capital		16,000
Less: Guarantee to Kaku {1,000 × (1/2)}		(500)		15,500

Kaku’s Capital	4,000
Add: Deficiency received from
Pinki			500
Deepti			500	5,000

				40,000		40,000